STAND. COM. REP. NO. 2757

Honolulu, Hawaii

RE:    S.B. No. 2020

       S.D. 2

Honorable Donna Mercado Kim

President of the Senate

Twenty-Seventh State Legislature

Regular Session of 2014

State of Hawaii

Madam:

     Your Committee on Ways and Means, to which was referred S.B. No. 2020, S.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO ECONOMIC DEVELOPMENT,"

begs leave to report as follows:

     The purpose and intent of this measure is to establish an agricultural foreign-trade zone, including its boundaries, jurisdiction, and benefits.

     Your Committee received written comments in support of this measure from the Hawaii Farm Bureau Federation, Sugarland Growers, and one individual.  Written comments on this measure were submitted by the Department of Business, Economic Development, and Tourism.

     Your Committee finds that foreign trade zones are secure areas under the supervision of the United States Customs and Border Protection and are located in or near ports of entry.  Foreign trade zones provide the benefit of allowing goods to be placed in the foreign trade zone and thus not be subject to United States duty or excise tax.  Furthermore, Customs and Border Protection provides added security for the transfer of goods or merchandise in and out of the foreign trade zones.  Your Committee further finds that a foreign trade zone will allow Hawaii's farmers and ranchers to fairly compete with overseas producers.

     Your Committee has amended this measure by:

(1)  Recasting the language that explicitly establishes the agricultural foreign-trade zone by authorizing the Governor to do all things necessary to seek federal approval of the agricultural foreign-trade zone, to more accurately reflect the existing foreign-trade zone establishment process;

(2)  Changing the effective date to July 1, 2050, to facilitate further discussion on the measure; and

(3)  Making technical nonsubstantive amendments for the purposes of clarity, consistency, and style.

     As affirmed by the record of votes of the members of your Committee on Ways and Means that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 2020, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No. 2020, S.D. 2.

Respectfully submitted on behalf of the members of the Committee on Ways and Means,

____________________________

DAVID Y. IGE, Chair